Iowa's use of special tax areas leads nation

Research critical of TIF, but local officials say it's vital

Iowa is the most prolific user in the nation of tax increment financing to spark economic development but is “modest” in borrowing against the proceeds, according to a new national report.

Iowa has 3,340 TIF districts, nearly double the next most prolific user — Minnesota with 1,719.

But when it comes to TIF borrowing, Iowa ranked No. 13 in the nation with $315 million between 2000 and 2014, according to “Improving Tax Increment Financing for Economic Development” by University of Illinois Chicago professor David Merriman for the Lincoln Institute of Land Policy.

In contrast, for example, California has only 743 TIF districts but the most borrowing against them of any state — more than $25 billion over the period.